Gulf Air could avoid further turbulence

Bahrain's national carrier Gulf Air, which announced a major restructuring plan in December, remains on course to deliver on its strategic goals of effective fleet and resource utilization, a report said. In a statement last night, the airline said it has recorded progress within a month of implementing the new strategy, according to the report published in our sister newspaper, the Gulf Daily News. Last month, it reduced overall losses by more than 34 per cent compared with January 2012. "Despite a difficult operating environment, the restructuring measures have started yielding results and the strategy remains on track to achieve overall cost savings of 24 per cent by the end of 2013," the statement said. The strategy is being spearheaded jointly by the airline's board of directors, led by its chairman and Deputy Premier Shaikh Khalid bin Abdulla Al Khalifa, and the airline's management. The realignment of the airline's network to strengthen its Mena operations progressed as planned last month with the closure of four loss-making routes. The airline is hoping to complete its network realignment by the end of next month. It will continue to strengthen its regional markets - offering flexible and multiple flight options while providing strategic links to selected European, Far Eastern and Indian markets. The groundwork has begun to simplify and align the airline's fleet with its revised network requirements. Successful negotiations were concluded last month to return two leased regional Embraer E90 jets. Further negotiations are underway to complete the fleet realignment by April. The airline now operates an all-Airbus fleet. The finalised fleet of 26 aircraft will be optimally utilised to serve the airline's new network. Using predominantly new planes with high specification on-board products, Gulf Air will operate one of the youngest fleets in the region with an average age of just 4.3 years. "With a focus on high-demand and high-yield point-to-point routes to connect Bahraini businesses with regional markets as opposed to low-yield transit traffic, Gulf Air continues to differentiate itself from its regional competitors and carve a long-term niche in a highly competitive business environment," the statement added. As part of the restructuring plan, all cost elements of the business are being rationalised, including manpower. "Majority of the reductions will be done through non-renewal of contracts, restructuring in outstations, natural attrition and a voluntary retirement scheme," the statement said. However, as per the mandate of the government, the airline's priority in Bahrain is to preserve as many positions that can be filled by skilled and qualified nationals. "No Bahraini pilots will be affected by the restructuring," it added. Last month, the total workforce was reduced by 6 per cent. "This to date has increased to 15 per cent. In January, the airline's Bahrainisation levels at headquarters reached a record high of 85 per cent; delivering on Gulf Air's commitment to be a key Bahraini employer." Further right-sizing will be implemented across all levels of the organisation and will be done on a performance-based review and individual job assessment. The airline is expected to complete workforce-related changes within the second quarter of the year. From: Arabnews